In the robbery of 1986, twenty-six Old Master paintings of the seventeenth and eighteenth century were taken from the New Norcia Museum and Art Gallery. Although all but one were eventually recovered, they returned to New Norcia in a sorry condition. Cut from their frames and rolled up they were badly damaged and in need of extensive restoration. Without resources to adequately address the problem, the monks of New Norcia decided to stabilise and store the paintings and turned their attention to establishing a contemporary collection of Australian art.

Since 1986 the monks have put together a collection of over 50 works including paintings, sculpture and craft. A number of the works are prize-winners from the Mandorla Exhibition for Religious Art. This exhibition, organised by the Mandorla Centre for Inner Peace, seeks to support the development of religious art in Australia by offering a biennial prize entitled the Kevin Sullivan Award. The winning work remains on display at the New Norcia Museum and Art Gallery.

Other pieces in the collection have been donated by artists or benefactors. Still others have been purchased by the Gallery's Art Acquisition Fund. This fund, which is largely made up of visitors' offerings placed in the donation box, has enabled the monks to continue to purchase works for public display.

The Australian gallery stands as a tribute to the generosity of artist and visitors who value the artistic tradition of New Norcia.

From 7 May 2007 until Easter 2008, the ReIncarnations Exhibition is on display in the Australian Contemporary Gallery. In this exhibition, drawn exclusively from the holdings of the New Norcia Art Gallery, traditional European representations of the Annunciation, Birth and Death of Jesus hang alongside interpretations by contemporary Australian artists.